Davey urges MEPs to support backloading ETS

15th April 2013


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The energy secretary has called on the European parliament to back changes to the EU emissions trading scheme (ETS) that would delay the sale of 900 million allowances

Tomorrow (Tuesday 16 April) the parliament will vote on European Commission proposals to postpone the auction of millions of ETS permits due to be sold in 2013–2015 until 2018–2020 in a move known as “backloading”.

The measure is aimed at preventing the failure of the scheme, which has been undermined by a massive surplus in allowances that has seen the price of carbon fall as low as €4 a tonne.

Backloading the sale of allowances during phase III will boost the price of allowances to €12 by 2015, according to the commission, ensuring the scheme remains a driver to cut carbon emissions.

However, several member states, including Poland, are opposed to the measure and the EU parliament’s industry, research and energy committee has previously voted against the plan.

Ahead of the vote, the UK’s energy secretary Ed Davey has come out in support of the changes, warning that the current low carbon price is a threat to investment in green technologies and meeting climate change targets.

“Removing some of these allowances over the next few years would help to restore confidence in the market, before longer-term reforms to strengthen the system can be brought in,” he said.

“Any delay could lead to greater costs in the long-term in meeting the EU’s 2050 objectives and would undermine the move to a low-carbon economy.”

Davey went on to echo the warnings of EU climate change commissioner Connie Hedegaard, who said in February that if the ETS failed, the 27 member states may each have to introduce national carbon taxes.

“If backloading and structural reform are not supported, member states may adopt unilateral policies to deliver their energy and climate objectives and stimulate investment, creating a complex patchwork of climate legislation across the EU that is inefficient and increases regulatory burdens on industry,” said Davey.

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